The Property:
Located in Phoenix, Arizona, this property is a .32 acre vacant lot zoned R3-RI for multi-family use. The zoning allows 22.78 units per acre.

The Find:
The property was found while door-knocking in an Area of Expertise. There was a For Sale By Owner Sign posted, so we made a phone call.

The Technique:
We purchased this property in early January and offered a large down payment with seller financing terms. We put $30,000 down to close and the seller agreed to carry back $100,000 until April 2006 with no interest. The seller also agreed to consider an extension on the seller finance in April with an increased down payment. The highest and best use was to develop 6 units on this property. We began preliminary plans and immediately listed the property for $200,000. Our goal was to develop if we did not sell as is for a profit.

The Contract:
Within the seller-financing period a MWI student came to us wanting to do a 1031 exchange with this property. We sold the property to him for $190,000. Additionally, we partnered with the student to develop 6 units on the property.

The Result:
In four months we doubled our money using seller financing. We took $30,000 out of our pocket and realized a $60,000 gain. But we not only made a profit, we also were able to help a client rollover his investment in one property to another, which offered more potential. This opened an opportunity for us to create a partnership with him to develop 6 units on the lot over the next two years to create additional profit. This deal marks our first 1031 exchange in our 1031 Flixer Program.